EU approves HP, Compaq merger

BRUSSELS: (AFP) The European Commission said Thursday that it has approved the merger between US computer makers Hewlett-Packard and Compaq.

Explaining its decision, the commission said HP, which is buying Compaq, would not be able to increase prices and consumers would continue to benefit from sufficient choice and innovation.

In the personal computer market, the commission said the merged entity would continue to face strong competition in Europe from rivals including IBM, Dell and Fujitsu-Siemens Computers.

Also, it said there was an absence of significant barriers to entry in the market and the practice of non-exclusive contractual relationships between manufacturers and retailers.

The merger is expected to create a computer company second only to IBM in terms of revenues if shareholders approve the merger. --AFP